In recent years, experimentation has come to the forefront of the research agenda of scholars in strategy and entrepreneurship, and it is more clearly emerging as a way to gradually solve uncertainty and produce validated learning. While theoretical work outlines that entrepreneurship – especially in the early stages – is essentially about experimentation, we are yet to understand its consequences and impact on entrepreneurs.
Throughout my research, I examine the effect of emerging practices such as accelerators, hackathons, and crowdfunding often in collaboration with government entities and incubation hubs. I have been managing research projects funded by institutions such as the UK government (Department for Business, Energy and Industrial Strategy), the Italian government (Ministry of Education, University and Research), the Strategy Research Foundation, and the Innovation Growth Lab. My work also aims to identify a set of practices that can help entrepreneurs navigate the difficult process of new venture creation.
An overview of my research work is provided below:
A Scientific Approach to Entrepreneurial
Decision-Making: Evidence from a Randomized Control Trial
With Arnaldo Camuffo, Alessandro Cordova and Alfonso Gambardella
A classical approach to collecting and elaborating information to make entrepreneurial decisions combines search heuristics such as trial and error, effectuation, and confirmatory search. This paper develops a framework for exploring the implications of a more scientific approach to entrepreneurial decision making. The panel sample of our randomized control trial includes 116 Italian startups and 16 data points over a period of about one year. Both the treatment and control groups receive 10 sessions of general training on how to obtain feedback from the market and to gauge the feasibility of their idea. We teach the treated startups to develop frameworks for predicting the performance of their idea and to conduct rigorous tests of their hypotheses, very much as scientists do in their research. We let the firms in the control group, instead, follow their intuitions about how to assess their idea, which has typically produced fairly standard search heuristics. We find that entrepreneurs who behave like scientists perform better, pivot to a greater extent to a different idea, and do not drop out less than the control group in the early stages of the startup. These results are consistent with the main prediction of our theory: a scientific approach improves precision – it reduces the odds of pursuing projects with false positive returns, and increases the odds of pursuing projects with false negative returns.
Management Science, available here
Covered by Quartz, here
Small Changes with Big Impact: Experimental Evidence of a Scientific Approach to the Decision-Making of Entrepreneurial Firms
With Arnaldo Camuffo and
Job Market Paper
Identifying the most promising business ideas is key to the introduction of novel firms, but predicting their success can be difficult. We argue that if entrepreneurs adopt a scientific approach by formulating problems clearly, developing theories about the implications of their actions, and testing these theories, they make better decisions. Our theory predicts that the scientific approach corrects the problem of overestimation and underestimation of the returns from business ideas. This has implications for important entrepreneurial choices, such as discontinuing a business idea and pivoting, as well as for performance. Using a field experiment with 251 nascent entrepreneurs attending a pre-acceleration program, we examine the effect of a scientific approach to decision-making. In the field experiment, we teach the treated group to formulate the problem scientifically and to develop and test theories about their actions, while the control group follows a standard training approach. We collect 18 data points on the decision-making and performance of all entrepreneurs for 14 months. Results show that treated entrepreneurs are more likely to close their start-up. We also find that scientific entrepreneurs are more likely to pivot a small number of times, suggesting that the scientific approach makes them more precise in pivoting to more valuable ideas. Finally, we find that the scientific approach increases revenue, suggesting that a more accurate assessment of ideas helps entrepreneurs to make better decisions and eventually leads to better performance. This study shows that the scientific approach is a critical link between decision-making and performance of nascent entrepreneurs.
Finalist, Best Conference Paper Award, SMS Minneapolis
Finalist, Research Method Award, SMS Minneapolis
In preparation for resubmission
Latest version available here
When do Entrepreneurs Benefit from Acting Like Scientists? A Field Experiment in the UK
With Elena Novelli
Prior research suggests that firms in entrepreneurial settings benefit from a scientific approach to decision making that combines cognitive and evidence-based components. But to what extent and under what conditions is the scientific approach to decision-making associated with superior performance? To address this question, we conducted a field experiment with 261 UK entrepreneurs at different stages of business development, training half of them on a scientific approach to decision making. Our results show that firms make the most of scientific decision-making when they are at a more advanced stage of development, as they generate higher revenues and productivity. We elaborate on the mechanisms behind this result and the implications for future research.
Academy of Management Best Paper Proceedings 2021
Distinguished Paper Award Winner, Knowledge and Innovation, Academy of Management 2021
Best Conference Paper Award Winner at the Strategic Management Society Conference 2021
Best Conference Paper Award Winner at the DRUID Conference 2021
Finalist for the Kauffman Best Paper Award in Entrepreneurial Cognition at the Academy of Management 2022
Latest version available here
A Scientific Approach to Innovation Management: Evidence from Four Field Experiments
With Arnaldo Camuffo, Alfonso Gambardella, Danilo Messinese, Elena Novelli, Emilio Paolucci
Our model shows that managers and entrepreneurs make better decisions under uncertainty if they adopt a scientific approach in which they formulate and test theories. The model predicts that they are more likely to terminate projects with negative returns, commit to projects with positive returns, or pivot to projects with higher returns. We test these implications by combining the results of four Randomized Control Trials (RCTs) involving 754 start-ups and small-medium enterprises and 10,730 data points over time. The empirical analysis corroborates the predictions of the model.
In preparation for resubmission
Latest version available here
Sharing Stories About Venture Creation: How Crowdfunding Audiences React to Experimentation and Planning in Entrepreneurial Narratives
With Charlie Williams
Early-stage entrepreneurs must mobilize resources and support to develop their business. Our study focuses on how narratives related to experimentation and planning affect success in mobilizing resources. Using data from a leading crowdfunding platform and two online experiments, we find that novice entrepreneurs – those who lack prior experience on the platform – who describe an experimental strategy for developing their venture are more likely to raise funds than others, but this positive effect goes away with experience. On the other hand, planning narratives are beneficial for both novice and experienced entrepreneurs, and even increase their impact for experienced entrepreneurs. Through this study, we show that narratives including the “how” of venture creation – experimentation and planning – are valued by important audiences, but that their effect depends on the experience of the entrepreneur in different ways. With the growing emphasis among entrepreneurs on experimentation and lean start-up techniques, this research clarifies the contingent ways in which narratives about these activities can help nascent entrepreneurs gain access to resources as well as the risk they carry for those with more experience.
Latest version available here
Do Scientific Entrepreneurs Invest Financial Resources Differently? Evidence From Two RCTs
With Daniele Battaglia
In early entrepreneurship, the benefits of experimentation stem from two sources: the amount of information an experiment generates and the investments they require. Despite their importance, we have little knowledge about the investments entrepreneurs make as they learn about the prospects of their businesses. Using a question-driven approach, we explicitly focus on the investments made by entrepreneurs by examining data from two field experiments in Italy with 382 early-stage start-ups. Both experiments followed the same structure: we created pre-acceleration programs where half of the participants learned about a scientific approach to decision-making and half did not. We observed all entrepreneurs for 14 months after the treatment and found that treated entrepreneurs invested more, but generated higher revenues and profits once entered the market. We show that these higher investments take place because treated entrepreneurs have falsifiable hypotheses, which also lead to higher revenue. Elaborating on these results, we put forward several insights for literature on strategy and entrepreneurship.
Nomination, Best Conference Paper Award at the Strategic Management Society Conference 2022
Collaboration and Competition among Entrepreneurs: Evidence from an Incubation Program
With Hyunjin Kim
In this study, we empirically examine the effect of sharing information with close or distant competitors as part of an incubation program. There is recent evidence of substantial heterogeneity in acceleration programs, with qualitative research highlighting that the main benefit for participants to these programs is the increased exposure to information and the feedback they obtain. Such exposure helps balance the bounded rationality of founders. Consistently, studies in other settings (business owners retreat) find that information exchange with peers has long-lasting and positive effects on firm outcomes With this study, we aim to investigate the extent to which nascent entrepreneurs prefer not to share information about their business, the extent to which this preference is correlated with actual behaviour, and the extent to which initial preferences and interactions with close/distant competitors affects decision-making over time. 600 entrepreneurs taking part in an incubation program are randomly assigned to conduct exercises in-pairs with other participants who are either close competitors, distant competitors, or not competitors (i.e., operating in completely different industries). We record the extent to which entrepreneurs are willing to share information with competitors prior to starting the course, and use this information to understand whether entrepreneurs who are more reluctant to share information actually share information about their business, and if they perceive interactions with competitors to be beneficial for them. In addition, we test if these interactions affect key choices entrepreneurs make (such as pivoting, or testing new courses of actions).
Antecedents of Entrepreneurial Decision-Making
Across geographies, entrepreneurship brings innovation to societies and contributes to their economic growth. However, there is strong evidence that entrepreneurs have poor methods to make effective business-related decisions - a problem that limits innovation and reduces the success of many start-ups. Recently, evidence has shown that a scientific approach to decision-making brings large performance benefits - this project studies the extent to which entrepreneurs employ a scientific approach to decision-making. This project also links the use of a scientific approach to the characteristics (such as experience and background) and behavioral traits (attitudes and preferences) of the entrepreneurs. The goal is to predict ex-ante the characteristics and traits that explain variation in the use of scientific decision-making through data collected via a large-scale survey. To achieve a large data set, this project uses an innovative methodology in the field of entrepreneurship: a gamified survey implemented through a dedicated website and promoted using social media. Entrepreneurs will be encouraged to complete task-based scenarios and a survey that assesses their likelihood of success. While participants will receive a scored result of their entrepreneurial readiness, the project will collect data linking entrepreneurial decision-making to personal characteristics and traits. Findings from this project can: (i) identify ex-ante the characteristics of the entrepreneurs more likely to succeed; (ii) inform institutions and policy-makers about the link between decision-making and other personal characteristics and behavioral traits, guiding targeted interventions; (iii) pave the way for a new methodology to collect data.
Funded through the Émergence Grant